Leading independent energy company, Apache Corp. (APA) has agreed to sell oil and gas plays in western Alberta, Canada to privately held Canadian natural gas producer, Ember Resources, for a consideration of $214 million. Subject to regulatory and other approvals, the agreement is expected to close during the third quarter.
The assets under consideration – the Nevis, North Grant Lands and South Grant Lands – stretch 530,000 net acres. The acreage has more than 2,700 wells with average net production of 67 million cubic feet of gas and 237 barrels of liquid hydrocarbons per day.
This asset sale is in sync with Apache’s plans to redesign its portfolio to segregate its assets into those that fetch good returns for the company and those that need to be sold off.
Apache plans to divest $4 billion by the end of 2013 and use the proceeds to increase its financial flexibility, reduce debt and generate funds to carry out the 30 million share repurchase program.
Other recent divestitures of Apache include the sale of its Gulf of Mexico (GoM) Shelf assets for a cash consideration of roughly $3.75 billion to Fieldwood Energy LLC.
The Houston-based energy firm is focused on increasing liquid production from its remaining assets in Canada’s Western Sedimentary Basin. The company is also concentrating on the Kitimat LNG project through which it plans to capitalize extensive unconventional resources in northern British Columbia.
Apache currently holds a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.
Meanwhile, one can look at other stocks in the exploration and production (E&P) industry such as Matador Resources Company (MTDR), Range Resources Corporation (RRC) and VOC Energy Trust (VOC) as good buying options. All these stocks currently hold a Zacks Rank #1 (Strong Buy).
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